IndiaAudit Lens

Rule 28 of the CGST Rules, 2017

From the IndiaAuditLens Law Library

GST›CGST Rules, 2017›Chapter IV, Determination of Value of Supply

At a glance

Entitlement and conditions

Rule 28(1), provisosFor goods intended for further supply as such, the supplier may choose ninety percent of the recipient’s price for like goods to an unrelated customer. Where the recipient is eligible for full input tax credit, invoice value is deemed open market value.
Rule 28(2)Overriding the ordinary method, a corporate guarantee to a bank or financial institution for a related recipient located in India uses one per cent of the guarantee amount per annum or actual consideration, whichever is higher. Full input tax credit eligibility instead permits the invoice value as the deemed service value.

Procedure, powers and definitions

Rule 28(1)(a)–(c)Value follows open market value, then like-kind-and-quality supplies, then rule 30 and rule 31 in that order. The rule applies to the specified distinct persons and related supplier-recipient relationships, excluding agents.
Rule 28(2)The law does not settle the mechanical annual allocation for an identified guarantee duration.

Rule 28 values supplies between related or distinct persons, excluding supplies through an agent. It starts with open market value and provides alternatives for resale goods and full-credit recipients. A separate corporate-guarantee rule overrides the ordinary method for a related recipient in India. That rule compares an annual percentage with actual consideration, subject to its own full-input-tax-credit invoice-value exception.^[1]

Quick facts

Rule 28, CGST Rules, 2017

Value of supply of goods or services or both between distinct or related persons, other than through an agent

Provision
Act	Central Goods and Services Tax Rules, 2017
Chapter	IV, Determination of Value of Supply
Rule title	Value of supply of goods or services or both between distinct or related persons, other than through an agent
Amendments
Last amendment	10 July 2024: Inserted vide Notification No. 12/2024 - CT dated 10.07.2024 w.e.f. 26.10.2023.
Amendments	2 footnotes in the CBIC text (table)
Related provisions
Other rules	Rule 30, Rule 31
Sections	Section 25 of the CGST Act, 2017
Structure 28(1)Ordinary distinct-or-related scope 28(1)(a)–(c)Ordinary OMV and ordered fallback 28(1) first provisoOptional onward-price conditions 28(1) first provisoNinety-percent onward-price amount 28(1) second provisoOrdinary full-credit invoice deeming 28(2)Corporate-guarantee special population 28(2)Corporate-guarantee period valuation 28(2) provisoCorporate-guarantee full-credit invoice deeming 28(2)Corporate-guarantee annual allocation assessment
Source
Law text	CBIC tax information portal, served on 17 September 2026^[1]

Text

The text below is the rule as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.^[1] The Rules as published in the Gazette of India is the legal source.

Rule 28, verbatim (show)

Rule 28

Rule 28. Value of supply of goods or services or both between distinct or related persons, other than through an agent. -

¹[(1)] The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall-

(a) be the open market value of such supply;

(b) if the open market value is not available, be the value of supply of goods or services of like kind and quality;

(c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order:

Provided that where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person:

Provided further that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services.

¹[(2) Notwithstanding anything contained in sub-rule (1), the value of supply of services by a supplier to a recipient who is a related person ²[located in India], by way of providing corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be deemed to be one per cent of the amount of such guarantee offered ²[per annum], or the actual consideration, whichever is higher.]

²[Provided that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the value of said supply of services.]

1. Inserted vide Notification No. 52/2021 - CT dated 26.10.2023.

2. Inserted vide Notification No. 12/2024 - CT dated 10.07.2024 w.e.f. 26.10.2023.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the rule they come from. They describe what the rule asks; they do not decide it.

Ordinary distinct-or-related scope 28(1)

Questions to answer on the file3 questions

Are these registrations distinct persons under section 25(4) or25(5)?
Are the supplier and recipient related under section 15?
Is the supply made through an agent?

Ticks stay in this browser only.

Ordinary OMV and ordered fallback 28(1)(a)–(c)

Questions to answer on the file7 questions

Is open market value determinable?
What is the established whole-supply open market value?
Is the like-kind-and-quality value determinable?
What is the established whole-supply like-kind-and-quality value?
Is the whole-supply value determinable under Rule 30?
What is the established whole-supply value under Rule 30?
What is the established whole-supply value under Rule 31?

Ticks stay in this browser only.

Optional onward-price conditions 28(1) first proviso

Questions to answer on the file4 questions

Has the supplier elected the ninety-percent method?
Are these goods intended for further supply as such by this recipient?
Are the onward goods of like kind and quality?
Is the onward customer related to the recipient?

Ticks stay in this browser only.

Ninety-percent onward-price amount 28(1) first proviso

Questions to answer on the file1 question

What price did the recipient charge for the comparable onward supply?

Ticks stay in this browser only.

Ordinary full-credit invoice deeming 28(1) second proviso

Questions to answer on the file3 questions

Is this recipient eligible for full input tax credit on this supply?
What supply value is declared in this invoice?
What open market value has been used in the ordinary valuation?

Ticks stay in this browser only.

Corporate-guarantee special population 28(2)

Questions to answer on the file5 questions

Are the supplier and recipient related under section 15?
Is this recipient located in India?
Is this a service of providing a corporate guarantee?
Who receives the corporate guarantee: banking company or financial institution?
Was that guarantee provided on behalf of the recipient?

Ticks stay in this browser only.

Corporate-guarantee period valuation 28(2)

Questions to answer on the file3 questions

What is the amount of the guarantee offered?
What duration in annual units does the legally established guarantee working require?
What actual consideration relates to that same complete guarantee duration?

Ticks stay in this browser only.

Corporate-guarantee full-credit invoice deeming 28(2) proviso

Questions to answer on the file3 questions

Is this recipient eligible for full input tax credit on the guarantee service?
What value is declared in the guarantee-service invoice?
What supply value was used for this guarantee service?

Ticks stay in this browser only.

Corporate-guarantee annual allocation assessment 28(2)

Questions to answer on the file1 question

Is this annual-unit allocation supported for the guarantee duration?

Ticks stay in this browser only.

Amendment history

The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.^[1]

Amendments to Rule 28 as footnoted in the CBIC text
Note	Change
1	Inserted vide Notification No. 52/2021 - CT dated 26.10.2023.^[2]
2	Inserted vide Notification No. 12/2024 - CT dated 10.07.2024 w.e.f. 26.10.2023.^[3]

Provisions connected to Rule 28
Provision	Connection	Words that tie them
Section 25 of the CGST Act, 2017	this provision requires Section 25 of the CGST Act, 2017	28(1) "sub-section (4) and (5) of section 25"
Rule 30	this provision requires Rule 30	28(1)(c) "rule 30 or rule 31, in that order"
Rule 31	this provision requires Rule 31	28(1)(c) "rule 30 or rule 31, in that order"

Circulars and notifications

Circulars and notifications in the CBIC repository that cite this rule, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.

Circulars (5)

Number	Date	Subject
Circular No. 225/19/2024-GST	11 July 2024	Clarification on various issues pertaining to taxability and valuation of supply of services of providing corporate guarantee between related persons.
Circular No. 210/04/2024-GST	26 June 2024	Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit.
Circular No. 218/12/2024-GST	26 June 2024	Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person.
Circular No. 204/16/2023-GST	27 October 2023	Clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST
Circular No. 199/11/2023-GST	17 July 2023	Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons

Notifications (2)

Number	Date	Subject
Notification No. 12/2024-Central Tax	10 July 2024	Seeks to make amendments (Amendment, 2024) to the CGST Rules, 2017.
Notification No. 52/2023-Central Tax	26 October 2023	Seeks to make amendments (Fourth Amendment, 2023) to the CGST Rules, 2017

Unsettled questions

The words of Rule 28 do not answer this question. Where one decides a matter on the file, the answer depends on the position taken on it.

Is this annual-unit allocation supported for the identified guarantee duration? The statute provides no mechanical measurement for this question.

See also

Section 25 of the CGST Act, 2017: procedure for registration
Rule 30 of the CGST Rules, 2017: value of supply of goods or services or both based on cost
Rule 31 of the CGST Rules, 2017: residual method for determination of value of supply of goods or services or both

References

Central Board of Indirect Taxes and Customs. "Rule 28. Value of supply of goods or services or both between distinct or related persons, other than through an agent". Central Goods and Services Tax Rules, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
Notification No. 52/2021-Central Tax. Cited in CBIC footnote 1.
Notification No. 12/2024-Central Tax, dated 10 July 2024: Seeks to make amendments (Amendment, 2024) to the CGST Rules, 2017. Cited in CBIC footnote 2.

External links

CGST Rules, 2017, Rule 28 on the CBIC tax information portal